11 April 2013

We take a closer look at the role natural resource limits in combination with the excesses of unregulated finance capital are playing in blocking a global economic recovery.

By Roger Baker / The Rag Blog / April 12, 2013 In the first part of this series about "terminal capitalism," we saw a collection of evidence that the global system of capitalism, the organized basis for most world trade, is in deep trouble. The situation has become so serious and the problems so self-evident that the polls show many average American citizens are questioning the viability of capitalism itself.A U.S. economic recovery now seems little closer than when the current economic crisis hit hard about five years ago, with U.S. unemployment still at a near-depression level. The BRIC countries of Brazil, Russia, India, and China have done better than the U.S., but recently slower growth has affected these countries too. In "Terminal Capitalism / Part 2" we will take a closer look at the role natural resource limits in combination with the excesses of unregulated finance capital are playing in blocking a global economic recovery.

The capitalist imperative: Grow or die

Richard Heinberg, director of the Post Carbon Institute, begins his book, The End of Growth, as follows: "The central assertion of this book is both simple and startling: Economic growth as we have known it is over and done with." He then presents over 300 pages of various kinds of supportive evidence backing up this conclusion. I will touch on some evidence in this essay, while saying that since the book was published in 2011, the evidence in support of this conclusion seems stronger than ever.

If that is indeed the case, the end of growth is very bad news for capitalism itself, since capitalism is based on an inherently expanding economy that needs to keep growing or it dies. The way the capitalist system works is basically that bankers or finance capitalists extend credit; they lend money that is invested in the production of goods that are then sold to pay off the loans plus make a profit sufficient to pay back the lenders, with enough left over to reward the lenders with interest.

If and when such a system starts contracting, profits suffer or may disappear entirely and there is an economic crisis until confidence in the system is restored and growth resumes. It is in the nature of the capitalist system to be subject to periodic booms and busts that comprise the capitalist business cycle. Most economists including Marx have been well aware of this fact. The remedy proposed by Keynes was to stimulate a contracting economy with government-sanctioned deficit spending, as I described in "Terminal Capitalism / Part 1."

However, if the contracting global economy is unable to grow in real material terms due to some deeply rooted physical constraint or resource limit, then no governmental policy can revive the growth on which the system depends.

Governments can print money and inject it into the economy to try to revive spending, but If there is not enough cheap energy to permit a real economic expansion in terms of marketable goods, then the money will be spent sooner or later. Then the deception will be revealed by inflation due to a surplus of money and a shortage of goods.

There is a factor called the velocity of circulation of money, which is really psychological in nature amounting to a shift in consumer spending behavior from saving to spending. That leads easily to inflation or hyperinflation initiated when the public finally understands that there is more money than goods like food available for purchase. Governments can revive spending behavior by printing sufficient money, but they can't restore genuine prosperity without more real goods being produced and made available for purchase.

The remainder of this essay will attempt to explain the physical factors which are working in opposition to a real revival of the global economy in terms of its ability to expand the production of material goods. If that can't happen, then capitalists can no longer earn interest on their investments. Whenever a dollar invested or deposited in a bank is seen to buy less than before it was invested or banked, the incentive to invest, on which capitalism depends, disappears and the urge to buy commodities like gold that preserve their exchange value increases.

Growth may have already reached its limits and stopped forever! The global economy as a whole has not expanded since the energy and economic crisis hit in 2008. The numbers tell the tale. Stuart Staniford's excellent blog, Early Warning, tracks many interesting and important trends, including in this case the volume of world trade as measured by the WTO.

The following is Staniford's description of the situation about six months ago, featuring a seasonally corrected chart which shows that the volume of global trade seems to have stalled at about the same level that it had reached in mid-2008. Since the BRIC group has done a little better than most, it follows that the USA, Europe, and Japan have lost ground.

"...after the 2008 financial crisis, global trade collapsed and then recovered strongly till early 2011. For the last eighteen months, however, it's been basically stagnant. This likely reflects a combination of a sluggish U.S. recovery, a double-dip recession in Europe, and the slowdown in China. The global economy continues to act like an engine firing on only three cylinders."

Grounds for denial

Anyone familiar with world history knows that both the global economy and human population have been growing, at least fitfully, for thousands of years, and that the rate of growth accelerated greatly following the industrial revolution in England hundreds of years ago, with the advent of steam power and vast factories and improved machines to produce ever cheaper marketplace goods..

We like to tell ourselves that continual progress in science and technology will keep paying off by creating the new energy sources and the improved technology that we need to maintain ourselves and solve our problems, especially when we take care to grow in a smart way with sensible restraints.

When there were few factories, there was little need to regulate toxic discharges into lakes and rivers. Now with many more people and factories, most of us are willing to accept that stronger regulation is needed for the benefit of the general public. Increasingly we can see there are limits imposed by nature. Expansion of industry in China using coal for power is becoming a major health threat.

Few economists in the day of Adam Smith or Marx, with the notable exception of Malthus, could foresee a day that there would be any important limits to economic expansion that could not be overcome by human ingenuity and continually improving technology. If there were such limits, it was presumed that these were local limits that could be dealt with rather easily. If natural resources such as metal mines were exhausted in one area, one could always move to a fresh area, and use the advantages of continually improving technology to keep production expanding, ad infinitum.

In reality it is found that technology tends to harvest the low hanging fruit in terms of available resources first and then moves on. While there was an abundance of cheap energy available, this exhaustion of resources and a simultaneous increase in unwelcome consequences could be concealed for a time. In the USA, there has been a well-funded, right-wing corporate disinformation campaign to lead the public to deny that burning fossil fuel is changing the climate for the worse. Now people are beginning to realize the unhappy truth.

According to a growing number of skeptics, including Heinberg, the fatal flaw of economics, as traditionally practiced, is that it is an abstract discipline, oblivious to the limits of the finite world that it claims to study and to model. Since economics is a system that assumes exponential growth, it is apparent that at some point an expanding economy has to run into natural resource limits on our finite planet. Most people have assumed that most such limits were far in the future.

As individuals, the human participants in the growth process have been unlikely to be very conscious of global limits; they were mostly concerned with the everyday challenges of surviving, or raising and feeding a family. However, now, when there are more than 7 billion people collectively involved in an effort to keep the global economy growing to satisfy their own needs, limits are starting to crop up everywhere.

Illustration from India Resists.

Scientists have been warning us, but are we ready to listen yet?

The end of growth is not a far-fetched possibility. In fact, there have been a number of credible predictions that this is bound to happen sooner or later because of the increasingly serious side effects of growth itself. The 1972 book The Limits to Growth by the Club of Rome used a computer model to arrive at the conclusion that there are limits to the expansion of the global economy imposed by nature that are likely to lead to overshoot and collapse within the lifetimes of many now living .

The conclusions were updated in a sequel 30 years later. "Overshoot: The Ecological Basis of Revolutionary Change" is another classic work that pointed out the radical implications of an expanding human population overshooting the resources of a finite planet, followed by collapse.

There has been no shortage of warnings from the scientific community that continuing economic growth would lead to disaster. It has now been more than 20 years since a majority of the world's then-living Nobel Prize-winning scientists issued the "1992 World Scientists' Warning to Humanity". This is taken from the introduction:

Human beings and the natural world are on a collision course. Human activities inflict harsh and often irreversible damage on the environment and on critical resources. If not checked, many of our current practices put at serious risk the future that we wish for human society and the plant and animal kingdoms, and may so alter the living world that it will be unable to sustain life in the manner that we know. Fundamental changes are urgent if we are to avoid the collision our present course will bring about.

One might imagine that when the world's most eminent scientists warn humans that they had better shift course to avoid a looming environmental disaster, their warning would get a lot of media attention. That didn't happen. The World Scientists' warning was mostly ignored because it interfered with the nearest thing most humans have to a global religion; a belief in endless progress based on the blessings of modern science in combination with expanding world trade.

New investment based on improvement in technology has always brought benefits like easy communication and an improved standard of living. The fact that the few capitalists who maintain control of the investment and economic expansion process tend to be the major beneficiaries has tended to be overlooked.

Global warming by itself probably has the potential to cripple the global economy, as does human population overshooting food supply. With a global population of 7.5 billion, we see natural limits of one kind or another cropping up everywhere and interacting to create converging crises. More and more, solving one growth-related problem tends to create other problems. Trying to deal with any one limit tends to reveal other limits.

These include such factors as a limit on arable land for farming, potable water availability, increasing soil erosion and depletion, air and water pollution, the fertilizer needed to maintain high crop yield, and the list goes on. "Convergent Crises and Why We Deny Them" discusses the fact that these limits tend to interact.

An excellent and easily accessible explanation of the natural limits to growth by Charles Hall (see below) and John Day is here.

If we are very lucky, the global economic expansion forces will be forced into an orderly retreat before they overshoot the resource base. If not, humans everywhere are likely to face an abrupt economic collapse in which the decline is a lot steeper than the preceding economic expansion. This tendency for decline to be faster than growth has been called the Seneca Effect.

Rising energy cost, and oil in particular, is the factor that has the greatest ability to interfere with business as usual. The historical rate of global growth has fallen sharply in the last decade, and an important factor is the economic burden of rising energy costs. In Terminal Capitalism / Part 1, I cited the January 26, 2012, article in the distinguished science journal Nature by James Murray and David King, titled "Oil's tipping point has passed." This paper points out that the global economy seems to have permanently shifted to slower growth after the world supply of cheap conventional oil peaked in 2005, when we started to use much higher priced oil, like the oil we get by drilling in the Gulf of Mexico.

The International Energy Agency has made it very clear that the global economy is at risk when oil prices are greater than $100 per barrel -- as they have been in recent years, and will surely continue to be, given the inelastic response of global production. Historically, there has been a tight link between oil production and global economic growth. If oil production can’t grow, the implication is that the economy can’t grow either. This is such a frightening prospect that many have simply avoided considering it.

Domestic oil used to be very abundant and cheap to produce in the United States; however U.S. oil production peaked in 1970, so the U.S. turned to cheaper imported oil. Now the cost of imported oil has risen sharply too, especially after the cheap conventional oil production hit its global peak.

The cost of oil or any other traded commodity is generally determined by the amount of work that it takes to produce that commodity. The concept of "energy return on investment" or EROI essentially means the payback ratio, or the amount of energy you need to put in in order to get even more energy back out.

The EROI concept is important from an economic standpoint whether it is applied to drilling for oil, or for the work expended in building a dam to generate hydroelectric power, or when building and using a wind turbine, or any other means of generating power. The April 2013 issue of Scientific American has an article by Mason Inman, "The True Cost of Fossil Fuels," which explains the EROI concept and its important implications for our existing economy. The same EROI concept has important implications for any human economy, whether ancient or modern, capitalist or socialist.

The EROI concept was developed by environmental scientist Charles Hall, who says of oil and gas, "Everywhere you look, the EROI is declining."

The Scientific American article is accompanied by an interview with Hall where he explains that different EROIs support different kinds of economic organization, and the mostly unwelcome economic implications of the currently falling EROI in the USA. As Hall says in this interview,

We know that the middle class has not increased its income now for 20 years. Behind that -- not always the immediate cause, but looking over the shoulder of the causes -- I find the decline in the availability of energy. It's terrifying to people -- politicians and economists -- who base everything on growth. I think they won't talk about it because the concept is terrifying.

Most people have little idea of how rapidly the EROI has been falling, and what this steep rate of decline implies for the U.S. economy, and indeed for the global economy. Richard Heinberg's book The End of Growth, in Chapter 3, gives some numbers and EROI estimates by Hall (pages 118-119). It is estimated that circa 1930 we could get back as much as 100 barrels of oil for every barrel we expended through drilling, giving an EROI of 100.

Photo by Albert Bridge / Geograph / Earth Times.

By 1970, this had fallen to about a 30-to-one payback or EROI. By 2005, the EROI had fallen domestically to about 15, A fairly recent paper by Hall, et al, indicates a current U.S. oil and gas EROI below 11. However the EROI for imported oil produced where the fields are less depleted has stayed higher and is now estimated by the Scientific American article to globally be about 16.

Meanwhile, the EROI from coal is still about 20, as is the payback ratio from wind in a good location. Photovoltaic solar EROI is much lower at about six. These numbers are rough averages and of course vary with location. Chinese coal payback economics is different from that in the USA, but these numbers give a rough idea, and indicate a steady EROI decline.

A falling EROI tends to show up as a price increase for everything. There is no way to avoid using increasingly costly liquid fuels to transport coal and in the course of producing and transporting all other commodities.

The steady decline in EROI for liquid fuels is particularly worrisome because almost all global transportation is powered by liquid fuels. That is why an economic peak to the global oil supply can cripple the world economy. Even a nation that uses a lot of coal for power like China is in trouble if it tries to convert its coal energy into liquid fuel energy. It can be done, but this results in a much lower EROI for the coal-based liquid. Liquid fuel energy, electric power energy, and thermal energy each have their own EROI economics.

It is estimated that a modern industrial economy needs an EROI of at least five or greater to function properly. If global oil supplies have already fallen to only 16, and are still falling pretty fast, it is apparent that some economies, and especially an oil-addictive economy like the USA, is in trouble no matter what kind of leadership it has. This is true until the economy has the time needed to make a transition which, as the "Hirsch report" indicates, necessarily requires several decades of serious effort.

There is a theory of maximum possible complexity of a society related to the EROI level at its economic base. Without economic growth, the whole system, what was once termed the "political economy" runs into political trouble too. You can't have a very technically sophisticated and centralized economy based on a low EROI. Nor can you maintain a complex legal and military support structure for global finance capital investment. Without cheap energy you cannot have a global system of finance capital that maintains an orderly system of global trade with its highly sophisticated and centralized production of complex goods.

American anthropologist and historian Joseph Tainter has written an important book, Collapse of Complex Societies in which he analyzes why civilizations like ancient Rome probably rose and fell in accord with a changing EROI, just as much as because of the abilities of their leaders. Ancient civilizations can't control the far reaches of an empire if they can't afford to feed the armies that maintain their central control.

There are analogies to be found today when the United States attempts to project its military power globally without the advantage of cheap oil. Similar limits apply when investment bankers attempt to organize complex global production systems which depend on complex global supply networks.

Why alternative energy probablycan't keep our economy growing

Since the cheap energy that built the U.S. economy is rapidly being depleted and is being replaced by more expensive energy, there is a natural desire to try to replace our energy with renewable energy, especially with wind and solar power as an alternative. How hard that would be, what it would cost, and how long it would take are the key issues.

In 2009 the Post Carbon Institute did a study of this question and put out a report, "Searching for a Miracle: Net Energy Limits and the Fate of Industrial Societies," which can be downloaded at this link. The abstract of this report concludes as follows:

Perhaps the most significant limit to future energy supplies is the “net energy” factor -- the requirement that energy systems yield more energy than is invested in their construction and operation. There is a strong likelihood that future energy systems, both conventional and alternative, will have higher energy input costs than those that powered industrial societies during the last century. We will come back to this point repeatedly.

The report explores some of the presently proposed energy transition scenarios, showing why, up to this time, most are overly optimistic, as they do not address all of the relevant limiting factors to the expansion of alternative energy sources. Finally, it shows why energy conservation (using less energy, and also less resource materials) combined with humane, gradual population decline must become primary strategies for achieving sustainability.

Currently the degree of alternative energy market penetration is low and is likely to stay that way. It is possible to cover our roofs with solar panels now, but if it were not difficult and expensive to get off the grid, it would probably already be common. President Obama started advocating wind and solar alternatives when he first came into office, yet these numbers are not increasing at nearly the rate that would be needed to replace fossil fuel energy before a declining EROI interferes.

Both Germany and China have industrial polices in place that mandate switching to alternative energy as soon as possible. Germany is running into limits caused by the need for backup power when the alternative energy level reaches about 10-20%. In China, about 70% of their power now comes from coal, with imported oil used as a supplement for transportation.

Making the switch from black to green energy is creating severe air pollution from the coal used for the transition. It is true that photovoltaic solar energy has gotten a lot cheaper in the last several years, due to a big push by China to expand its alternative energy industry. China has the advantage of a command economy to promote alternative energy which the USA lacks except for sporadic and controversial attempts like Solyndra.

Since the EROI for U.S. fossil fuel energy has been falling, it is becoming more and more costly to make the transition to wind and solar power alternatives. The average U.S. family is still in debt, and without real economic growth, those who can find jobs must now often work at the minimum wage. The economy is sending the message that alternative energy is becoming less affordable, even with much less expensive silicon photo-voltaic panels made in China.

Both wind and solar energy have the disadvantage of requiring high up-front capital costs. By contrast, gas turbines are an inexpensive way to generate electric power, and the natural gas produced by hydrofracturing or "fracking," is cheap for now. However this low cost is probably unsustainable, both because of rapid horizontal well depletion and because we are drilling and depleting the best locations first.

Besides a falling EROI to power the transition to alternative energy, there are other problems. Intermittent power sources require storage or backup when the wind isn't blowing and the sun isn't shining. Texas has had a policy of subsidizing the power grid to deliver power from West Texas where wind energy is cheapest, but the grid itself is expensive and the state is strapped for cash.

At certain times of the day when the sun is shining, PV energy can already cost less than fossil fuel energy, but most people demand power when they need it. Rooftop power requires very expensive battery storage (lead acid batteries are expensive and only last about five years whereas nickel-iron batteries are durable but expensive). If the energy comes from a public power grid, a backup source of fossil fuel power is still needed due to the intermittent generation factor.

Certain types of solar energy, like home water heating and solar ovens for cooking, are already cost-effective, and will likely come into common use when people are obliged to conserve energy because of its rising cost. Better thermal insulation is likewise very cost-effective.

Illustration from Theprisma.

Capitalism has become a global Ponzi scheme

A global peak in oil production is likely to be fatal for capitalism soon thereafter, as the globally prevailing economic institution, as the author has argued here. Given the choice, it seems better to face economic crisis sooner rather than later, both in terms of the lesser total damage done and the better chances for eventual recovery. Of course such an outlook is not apt to be well received, or to be adopted as policy, but the argument seems valid.

Recently Gail Tverberg's excellent blog, Our Finite World, has done a good job of explaining and updating the problems facing an economy based on lending and credit; to generate a real return on invested capital it must necessarily face a decline in growth. The situation is outlined in her recent post, "How Resource Limits Lead to Financial Collapse." As Tverberg says; "Many from the 'peak oil' community say that what we should worry about is a decline in the world oil supply. In my view, the danger is quite different: The real danger is financial collapse coming much earlier than a decline in oil supply."

In theory, the world of banking, of finance capitalism, is supposed to be closely in tune with the physical world, since it controls and impacts the real world through investments like mines and factories that produce goods for markets and consumers with money to spend.

A close link between the world of banking and money and the real physical world was once maintained and enforced by declaring that dollars could be redeemed on demand for gold or silver. There is now nothing to link the dollars created by the Federal Reserve to the physical world. Nowadays the dollar is a fiat currency, backed up by nothing except its prevalence as the standard reserve currency used for most global trade, and the fact that it has little competition in this regard. The worth of a dollar is only to be judged by what it will buy. This has changed over time, and nearly always for the worse.

Since the availability of oil for transportation is arguably the single factor that currently limits the growth of the global economy, the real worth of a dollar might as well be judged by the fact that it will now buy about a quart and a half of Brent crude oil on the global marketplace. Since there is a long-standing agreement in place to price globally traded oil solely in dollars, and since all countries need oil, this has tended to preserve the status of the dollar as the one currency needed to buy the oil which every country needs.

In effect, this means that all dollars should really be seen as petrodollars. The dollar lacks any plausible value except for its current purchasing power in oil or other liquid fuel, which has declined sharply over the last decade.

With all this in mind, lets try to put our current global situation in perspective. The system of capitalism, which is the foundation of the global economy and world trade, needs to keep expanding to maintain its health and avoid sinking into a deflationary world depression. A handful of giant investment banks indirectly control the entire U.S. economy, because they function as the board of directors for the Federal Reserve. The unelected Fed sets the prime interest rate and regulates the creation of dollars, by allowing the banks to loan dollars into existence.

In the absence of effective banking regulation to maintain discipline, the system has become strongly biased toward permitting the infinite exponential expansion of fiat currency and investment in defiance of our finite world. In other words, the global economy has become a vast Ponzi scheme. The distinctions between investment bankers, finance capitalists, and global corporations have become blurred.

Strip away the smoke and mirrors and bankers are revealed as respectable, well-paid gamblers who risk public money on investments that are likely to fail because of a constantly falling energy return on energy investment. With the end of meaningful banking regulation, the giant investment banks have been free to place bets on practically anything that involves money, with the wagers insured by the federal government.

The biggest investment bankers and their banks are regarded as too big to fail, and so they are essentially permitted to gamble without risk. The elimination of risk has, over time, actually led them to gamble on the riskiest ventures. These tend to pay the best returns, exactly because of the high risk. This interview -- "Our System is so Flawed that Fraud is Mathematically Guaranteed" -- features Chris Martenson interviewing banking expert Professor Bill Black. It paints an appalling picture of investment banking as a racket and a confidence game, where capital investment has shifted to the areas of greatest risk.

The biggest banks now hold hundreds of trillions of dollars worth of paper agreements, pledges to pay off a huge accumulation of speculations and hedges amounting to gambling debts still on the books. These speculative paper banking agreements dwarf the entire global economy, which is only about $70 trillion a year.

Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

This being the case, it becomes apparent that the American dollar is at the center of a vast global Ponzi scheme which can never pay back its lenders in terms of the anticipated buying power, simply because there is no longer enough cheap fossil fuel remaining for the global economy to recover after a severe crisis.

Nobody can accurately predict how long the current situation can be maintained but, given the facts of the matter, we can see that there is certainly going to be a global economic crisis. Only the timing, which is based on investor psychology and the Federal Reserve's ability to keep the game going, is uncertain.

To sum up the situation we face, the scientists are warning us that even at best, a well-managed global economy can only avoid a severe environmental crisis for perhaps three more decades, because of the fundamental limits of nature. However, the chances of our poorly managed system of global capitalism lasting even that long are slight. Given the time typically needed to recover from a severe economic crisis like the Great Depression, this suggests that a severe global economic crisis or collapse must put an end to capitalism as we know it in the not very distant future.

James Howard Kunstler has outlined some of the social response scenarios in his books The Long Emergency and Too Much Magic. The potential for transition communities to help us through the hard times to come are a topic of frequent discussion on Resilience.org, sponsored by the Post Carbon Institute, a think tank devoted to coping with these sorts of problems.

Local economies centered around local agriculture and local production of the goods needed for survival are likely to be an important part of our future. We cannot start planning soon enough.

[Roger Baker is a long time transportation-oriented environmental activist, an amateur energy-oriented economist, an amateur scientist and science writer, and a founding member of and an advisor to the Association for the Study of Peak Oil-USA. He is active in the Green Party and the ACLU, and is a director of the Save Our Springs Association and the Save Barton Creek Association in Austin. Mostly he enjoys being an irreverent policy wonk and writing irreverent wonkish articles for The Rag Blog. Read more articles by Roger Baker on The Rag Blog.]

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BOOKS / Alan Wieder : Paul Buhle's 'Radical Jesus: A Graphic History of Faith' by Alan Wieder / The Rag Blog. Noted historian Paul Buhle, who has published an acclaimed series of nonfiction comics, is one of the most prolific and insightful critics from the American left. "Radical Jesus," which communicates the social message of Jesus Christ in comic format, investigates the inequalities that exist in the world through a theological lens.

Rabbi Arthur Waskow : Israel, Hillel, and Idolatry by Rabbi Arthur Waskow / The Rag Blog. Hillel International, the "home" for many Jewish college students of diverse backgrounds and beliefs, has been beset with controversy about when uncritical support among American Jews for Israel becomes "idolatry of the State."

Paul Krassner : Is There a Doctor in the House? by Paul Krassner / The Rag Blog. The Coachella Valley in Southern California hosted a massive four-day health clinic that helped more than 2,500 uninsured patients. Krassner points out that California leads the nation in people without health insurance and says that "the insurance industry has a preexisting condition known in technical terminology as greed."

Kate Braun : Winter Solstice Falls on Saturn's Day by Kate Braun / The Rag Blog. Our celebrations during the Winter Solstice take from many traditions, including the Roman Saturnalia, Druid customs, the German "Yule," and the birth of Jesus; and it was Queen Victoria who popularized the lighted Christmas tree.

Allen Young : Ralph Dungan, the 'Good Liberal' by Allen Young / The Rag Blog. A recent obituary of Ralph Dungan, one of President John F. Kennedy's top aides who later served as ambassador to Chile, reminds Allen of a revealing experience he had with the man referred to by a historian as a "good liberal."

Ed Felien : A Good [Angry White] Man With a Gun by Ed Felien / The Rag Blog. Paul Anthony Ciancia considered himself a "good man with a gun" -- a warrior against the traitors who were taking over our government, bankrupting our currency, and trying to establish a New World Order -- when he walked into the Los Angeles airport and opened fire with an assault rifle.

Lamar W. Hankins : Right-Wing Rants and the Abominable Straw Man by Lamar W. Hankins / The Rag Blog. The Internet is a marvelous tool when used honestly and correctly, and with recognition of its limitations. But it is also home to angry rants, often from the far right, that make ridiculous claims -- like the one (that actually originated on a satirical site) saying that the Obama administration was setting up gasoline stations to provide free gas to low-income [read: black] people.

Harry Targ : My Nelson Mandela by Harry Targ / The Rag Blog. An irony of 21st century historical discourse is how real historic figures -- like the late Nelson Mandela -- get lionized, sanitized, and redefined as defenders of the ongoing order rather than activists who committed their lives to revolutionary change.

Michael James : Back to Uptown, 1965-1966 by Michael James / The Rag Blog. Mike continues his remarkable memoir, accompanied -- and inspired by -- photos from his upcoming book. His adventures -- and the making of an activist -- continue as he heads back to Uptown Chicago, "progressing along my path with another left turn and a big step into America."

Alice Embree : Chile and the Politics of Memory by Alice Embree / The Rag Blog. Chileans went to the polls Sunday and appear to be reelecting Socialist president Michelle Bachelet on the 40th anniversary of the bloody U.S.-supported coup against Socialist president Salvador Allende. Alice writes about the dramatic contradictions in Chilean politics and history.

Paul Krassner : A Tale of Two Alternative Media Conferences by Paul Krassner / The Rag Blog. Paul remembers the original Alternative Media Conference in June 1970 at Goddard College in Vermont -- and it was a wild and wooly affair headlined by the likes of Ram Dass, Harvey Kurtzman, and Art Spiegelman -- as the college hosts another conference keynoted by progressive radio host Thom Hartmann.

Harry Targ : STEM and the Tyranny of the Meme by Harry Targ / The Rag Blog. From the fear of "falling behind the Soviets" to the missile gap and, more recently the wars on drugs and terrorism, the fear of falling behind some fictional adversaries is an ongoing "meme" used by economic, political, and military elites. The latest? Now it's the "STEM crisis" and the fear that we're falling behind other nations in science and technology .

Alice Embree : Anne Lewis' New Website Brings Austin Movement History to Life by Alice Embree / The Rag Blog. Noted documentary filmmaker Anne Lewis has created a website called Austin Beloved Community that uses audio, film, photos, maps, and personal recollections to create a "digital collage" about the struggle for social and economic justice in Austin from the 1880s to the present. Alice interviews Lewis about the unique project.

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David McReynolds : We Are All Wounded Veterans by David McReynolds / The Rag Blog. Long-time pacifist writer and activist McReynolds says there's something "infinitely sad" about the recent celebration of Veterans Day. "In the bad wars -- which are the only wars we have fought for some time now -- there is the terrible knowledge that the enemy was never really the enemy," he says.

Michael James : Going Off Campus, 1965 by Michael James / The Rag Blog. Mike continues to share experiences and images from his rich history as an activist and adventurer -- that will be published in an upcoming book, "Michael Gaylord James' Pictures from the Long Haul." Here Mike reports on the Free Speech Movement at Berkeley, community organizing in Oakland, and his travels across the country in a 1957 Plymouth station wagon "drive-away."